Scatec ASA, a major renewable energy provider, has signed a 15-year Power Purchase Agreement (PPA) with BTG Pactual Comercializadora de Energía, a subsidiary of Brazil’s Banco BTG Pactual. The agreement will see Scatec build a 130 MW solar plant in Colombia.
The PPA will cover approximately 85% of the plant’s estimated energy production, with the remainder to be sold on the open Colombian market. The agreement, which is denominated in Colombian Pesos, is adjusted for inflation based on the country’s Producer Price Index.
The project, which will be Scatec’s first in Colombia, is located in Nariño, just over 100 kilometres west of Bogotá. The country has a supportive regulatory environment and is expected to add more than 5 GW of solar capacity over the next five years.
Scatec CEO Terje Pilskog said: “This agreement marks an important step for Scatec as we enter the Colombian market with a commercially robust project. Colombia offers a solid framework for renewable energy investments, and we are pleased to contribute to the country’s energy transition through our integrated business model.”
The total capital expenditure for the solar plant is estimated to be $110 million. Scatec will act as the designated Engineering, Procurement, and Construction (EPC) provider, responsible for about 80% of the capital expenditure. The company will also provide Operations & Maintenance (O&M) and Asset Management (AM) services.
The project will be financed through a combination of non-recourse financing and equity. Scatec will retain majority ownership, with Norfund joining as a minority equity partner. Scatec is in advanced negotiations for the non-recourse project financing, aiming for a leverage of 65%. Financial close and construction are expected to begin in 2025.
